Ulta Beauty (ULTA) Q2 Earnings beat

Ulta Beauty shares rose more than 5% in extended trading on Wednesday after the company reported fiscal second-quarter sales jumped more than 60% as shoppers rushed in to restock their makeup bags.

Ulta raised its full-year outlook after seeing the return of customer demand for beauty products at a faster pace than expected.

“This performance reflects the recovery of the beauty category, investments and choices we’ve made over the last year to adapt to the market disruption and strengthen our leadership position, and the ongoing efforts of our associates to deliver great experiences for our guests,” said CEO Dave Kimbell.

In trading earlier Wednesday, its stock hit a 52-week high of $390.68.

Here’s how the company did for its second quarter ended July 31 compared with what analysts surveyed by Refinitiv were anticipating:

• Earnings per share: $4.56 vs. $2.59 expected
• Revenue: $1.97 billion vs. $1.76 billion expected

Net income rose to $250.9 billion, or $4.56 per share, from $8.1 billion, or 14 cents per share, a year earlier.

Revenue jumped to $1.97 billion from $1.2 billion a year ago.

Analysts surveyed by Refinitiv had expected the company to earn $2.59 per share on revenue of $1.76 billion.

The revenue beat was driven by a 52.5% increase in transactions and a 26.7% increase in how much customers spent on average.

The company’s same-store sales grew 56.3% in the quarter. Last year, sales at stores open at least 14 months fell 26.7% due to the pandemic. Same-store sales in the quarter were 13.1% higher than 2019 levels.

“The resurgence of traffic in stores drove the strong comp performance,” Ulta CFO Scott Settersten said on the company’s conference call.

While store traffic during the quarter was higher than that of the first quarter, it still lagged behind 2019 levels. Ulta opened seven new stores during the quarter and closed one store, and plans to open 44 net new stores this year. Previously, the company expected to open 40 net new stores this year.

Active users in its customer loyalty program rose to 34.6 million, according to Kimbell.

As expected, e-commerce sales fell from a year ago, as coronavirus restrictions eased and vaccinated customers became more comfortable shopping in person. On a two-year basis, online sales during the period more than doubled.

As retailers continue to experience supply chain delays, Ulta is confident inventory levels at the end of the third quarter will be higher than its expected sales growth.

Executives said most of its products are made in the U.S. and Europe, but there is some limited exposure to delays coming out of China.

“Like others, we are managing global supply chain constraints, port congestion and other headwinds, including the resurgence of Covid-19,” Settersten said. “Our teams are working diligently to mitigate risks, and when appropriate we are proactively…